Support high for GST trim

The member's bill would remove GST from fruit and vegetables. Photo / Richard Robinson

Political momentum for removing GST from healthy food is increasing with both the Maori and Labour parties working on the idea.

But even in the event the two parties were to put aside their differences and work together on the policy they would not have the numbers to pass the required legislation since the National Party and United Future are opposed to it.

Maori Party MP Rahui Katene's Goods and Services Tax (Exemption of Healthy Food) Amendment Bill is likely to get its first reading when Parliament returns from recess next Tuesday.

The member's bill would remove GST from fruit and vegetables, bread and cereals, some dairy products, lean meat, poultry, seafood, eggs, nuts, seeds and legumes.

Yesterday, Labour Party leader Phil Goff - who has previously opposed similar proposals - said his party was close to adopting what he believed was a more workable policy to remove GST from fresh fruit and vegetables.

Revenue Minister Peter Dunne said Ms Katene's proposal wasn't viable because of problems around defining what constituted healthy food. Furthermore, removing GST from the food specified in the bill would mean the loss of about $330 million a year in tax revenue which would have to be found somewhere else.

But Mr Goff said removing GST from fresh fruit and vegetables was a more practical proposal and would cost about $200 million a year, an "affordable" amount equivalent to the increase in revenue from the rise in tax on tobacco.